World's largest steel maker near junk status: agencyJune 6, 2009...

World's largest steel maker near junk status: agencyJune 6, 2009 - 9:17AM
Ratings agency Standard and Poor's on Friday lowered its credit rating on ArcelorMittal, the world's largest steel maker, to two notches above junk status because of trouble in the steel industry.

Long-term debt ratings were cut from BBB-plus to BBB -- two leveks above junk status. Short-term debt ratings were downgraded from A-2 to A-3. The agency's outlook on ArcelorMittal was negative.

S and P said it expected ArcelorMittal to record "weaker" results this year as the steel industry suffers "a broad and severe weakening of its operating performance", notably reduced capacity along with lower shipments and prices.

"Market conditions appear to be stabilising but are likely to remain weak," S and P said.

It described the company's cost-cutting and spending reductions and other measures as "not sufficient" to stem the effects of the global economic crisis.

The agency said its negative outlook meant that ratings on ArcelorMittal could fall further if the company proved unable to show that it was capable of improving its performance.

On the Paris stock exchange ArcelorMittal shares actually ended the week with a gain of 4.07 per cent at 24.95 euros on a market that finished 0.82 per cent higher as metals and mining stocks got a bump after Rio Tinto scrapped a deal with Chinalco in favour of a tie-up with fierce rival BHP Billiton.

AFP